Cyprus Mail

Cypriot tourist industry wants to keep post-Brexit skies open

Following Britain’s exit from the European Union, widely known as Brexit, the reliance of the Cypriot tourism industry on arrivals from outside the EU will increase and thus the post-Brexit arrangements in travel will determine the future performance of the Cypriot economy, a tourist professional said.

dinos-kakkouras“The message we want to send is that no matter how Brexit ends up being completed, such arrangements have to be made that will not negatively affect tourism,” Dinos Kakkouras, chairman of the Association of Cyprus Travel Agents (ACTA) said in a telephone interview on Wednesday.

“Our position is that they should keep skies open and not introduce a visa requirement” for tourists from the UK, traditionally Cyprus’s largest source of incoming tourism, Kakkouras said.

Five months after the June 23 referendum and four months before the British government is expected to trigger article 50 of the European Treaty, uncertainty over the final form of Brexit persists. A recently leaked internal document showed that the British government has not defined its Brexit strategy yet.

While British government officials signalled that they are interested in maintaining access to the European single market while curbing immigration, a top priority for the Leave-campaign, their reluctance to accept the free movement of labour, may lead to a “hard-Brexit”. European officials and members of European national governments, including German finance minister Wolfgang Schaeuble, repeatedly pointed out that the European Treaty stipulates that the free movement of labour is, along with the free movement of goods, services and capital, an essential component of the free market.

Directly or indirectly, tourism accounts for roughly one fourth of Cyprus’s economy, which emerged last year from a prolonged recession and is projected to grow almost 3 per cent this year and 2.8 per cent in 2017.

There is room for a compromise, Kakouras said, which could help avoid getting to a regime regarding flight traffic similar to that with Russia, which is not part of the European open skies, and therefore an obstacle to access to Russian airports. Russia is Cyprus’s second largest source of tourism.

boris-johnson-ioannis-kasoulidesBritish foreign secretary Boris Johnson, who held talks with president Nicos Anastasiades and his counterpart Ioannis Kasoulides, said that while his country was leaving the EU, it was not leaving Europe. “We want to build the strongest possible links both with Cyprus and of course with the rest of our Europe neighbors and the Commonwealth as well,” Johnson, a major figure in the Leave-camp told reporters after meeting Kasoulides.

“It doesn’t mean that everything will change in a day,” ACTA’s Kakkouras added.

An official of the hotel industry said that, at least in the short-term, not much was likely to change for the worse.

“Planning for 2017 is already completed,” Zacharias Ioannides, director general of the Cyprus Hotel Association said on the phone. “Both airlines and tour operators have planned for an increase in their programmes next year, compared with this year, and pre-purchased packages”.

Still, because of an increasing trend towards “all-inclusive”, already preferred by roughly every second tourist, at the expense of “out-of-pocket expenses,” next year’s revenue from tourism is expected to again increase at a lower rate compared to arrivals, Ioannides said.

All-inclusive, which allows tourists to eat and drink at the hotels they spend their vacation, he said, is a by-product of the financial crisis and led tourists from other countries and “not just Britons” to opt for this type of vacationing.

According to the latest Cystat data, Britons reduced their average per-day spending by one tenth while holidaying in Cyprus in the months following the referendum, which is more or less proportional to the drop of the exchange rate of the pound.

“The devaluation of any currency will have an impact on the purchasing power of tourists from that country,” Kakkouras, the chairman of ACTA said.

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